The Center for Global Development and the Institute for Government present

The Politics and Economics of Britain's Foreign Aid: The Pergau Dam Affair

FeaturingTim Lankester
Author and Former Permanent Secretary
The Overseas Development Administration

Sir Simon Jenkins
British Columnist, Editor and Author

Owen Barder
Director for Europe

Center for Global Development

Moderated byJill Rutter
Programme Director
Institute for Government

The funding of the Pergau hydroelectric project in Malaysia in the early 1990s was the most controversial episode in the history of British aid. It created a political storm in Britain and Malaysia. The aid funding was linked to a major arms deal, and was surrounded by allegations of bribery. The economic case for the expenditure was so weak that the permanent secretary of the Overseas Development Administration felt obliged to request a formal ministerial direction before authorising the expenditure. When challenged in the courts, it was finally declared to be unlawful.

The affair has had a lasting impact on the UK government's subsequent aid policies. At a time when the respective accountabilities of ministers and civil servants are under the spotlight, this offers a chance to understand an important occasion when a Permanent Secretary exercised his accounting officer responsibilities - and the consequences.